Tuesday, August 07, 2012

Are There Too Many Subscription Options Available?

Remember, years ago, that kid that came around to your door asking you to "sponsor him" by purchasing a magazine subscription? You probably thought the pitch was good, right? Clever kid... And you said no! I'm wondering if the same is happening for restaurants and retailers? Are they getting overwhelmed with subscription-type software, hardware, hard goods, food, linen sellers? I spoke to a restaurant operator yesterday who explained to me his growing list of subscription services. "We just can't maintain cash flow when it goes out the door every month..." My argument is that he would likely complain if he had to front $50K for all this stuff upfront. But his point is well taken (I've heard this a few times already). As a seller of SaaS services and solutions, I'm proposing the following to combat the ever-ending feeling of the subscription model:
  1. Consistently refresh, re-innovate and rebuild your product... In other words, invest in the solution design, development and always deploy great features. Show your customers that their investment is coming back to them in spades! 
  2. PRESENT ROI CONSTANTLY! I use Salesforce.com, and other than their daily digest, which shows me usage characteristics, I am not presented with credible ROI. The business model proof needs to be built into the software... I can't tell you how many efficiency apps don't do this well. Always remind your customer why they bought your stuff! 
  3. And the best resolution this problem... Get away from subscription-based selling! Just like the kid from college, SaaS companies need to innovate. Is the SaaS model losing it's shine? I think so. At a recent trade show, all I heard about was subscriptions and upfront fees. I didn't learn about one new business model. I promise you the person that innovates here will be a wealthy individual. There needs to be a new model out there - something performance or metrics driven. What is it? Stay tuned, I'm hot on this topic and might have some cool idea to share... 

No comments: